Buy-to-let numbers and rates fall - Mortgages - News - Moneyfacts

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Buy-to-let numbers and rates fall

Buy-to-let numbers and rates fall

Category: Mortgages

Updated: 04/07/2012
First Published: 04/07/2012

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Latest research by Business Moneyfacts has revealed significant reductions in product numbers and average rates in the buy-to-let mortgage market.

According to the data, the number of buy-to-let mortgage products has fallen dramatically from 2,265 in July 2007 to just 411 today, reflecting a massive slump of 82%. Product availability was at its lowest during the height of the credit crisis in 2009, when there were just 191 deals available to those looking to rent out their homes.

The buy-to-let sector of the market is typically seen as high risk and many lenders withdrew their deals during the peak of the financial crisis. Some buy-to-let lenders even withdrew from the market completely.

The data also highlighted the fact that average rates within the sector have reduced. The average fixed rate buy-to-let mortgage is currently 5.03%, a reduction of 1.00% since July 2007. The average variable rate has fallen even further by 1.70%, to 5.03%.

Rachel Springall , spokesperson for Business Moneyfacts, said: " As interest rates have fallen for buy-to-let deals, product availability and therefore choice has also dropped a staggering 82% in five years.

"Due to the larger deposits required for first-time buyers as well as the strict credit checks, many more people are opting to rent. This demand for rental properties has increased competition in the buy-to-let market, and the continuation of falling interest rates will be welcome news to prospective landlords.

"To date the competition has been focused around the price of a few products rather than a wide selection of products, which allow for other considerations, such as service and additional benefits," she concluded.

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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